Compare loans for buying a flat online and save up to 20,000 euros
06.05.2025
5
Minutes
Katrin Straub
Managing Director at nextsure
The dream of owning your own flat begins with solid financing. However, taking out a loan without proper thought can cost you tens of thousands of euros over the term. Discover how a systematic online comparison can help you secure the best terms for your loan to buy a condominium.
The topic in brief and concise terms
A difference of 0.5 percentage points in interest can amount to more than €15,000 over the term on financing of €300,000.
Look out for flexible contract options such as free special repayments of up to five per cent per year and the option to change your repayment rate.
Plan to put down at least 20 per cent of the purchase price plus the full ancillary costs (around 10–15 per cent) as equity in order to secure the best interest rates.
Identify interest rate differentials as the primary cost lever
The interest rates for a ten-year mortgage currently average 3.4 percent. Even a difference in interest rates of just 0.5 percentage points can mean savings of more than 15,000 euros over 15 years on a loan of 300,000 euros. Banks assess your risk individually, which is why offers can vary by up to one percentage point. A comprehensive mortgage comparison is therefore the first step towards significant savings. The ECB's key interest rate has a direct influence and stands at two percent in July 2025, which affects the banks' refinancing costs. This market dynamic underlines the need to compare offers actively rather than simply accepting the first offer from your local bank. This lays the foundation for robust and cost-efficient financing of your dream property.
Assess contract details strategically beyond the nominal interest rate
A favourable interest rate is only half the battle; the flexibility of your contract is just as crucial. Look for free additional options that secure your financial flexibility in the long term. Many banks offer valuable, flexible contractual features.
A list of important options includes:
Special repayments: The option to repay up to five per cent of the outstanding debt free of charge once a year significantly shortens the term.
Changes to the repayment rate: At least two free changes to the repayment rate during the fixed-interest period should be included in the contract so that you can respond to changes in income.
Long fixed-interest period: In periods of low interest rates, a fixed term of 15 or 20 years offers a high degree of planning certainty against interest rate risks.
Interest-free availability period: Secure at least twelve months during which the bank does not charge interest on the loan amount that has not yet been drawn down.
These options can cost an interest-rate premium of 0.01 to 0.05 percentage points, but it often pays off. A well-considered follow-on financing takes these factors into account from the outset. A careful review of these details separates a good loan offer from an excellent one.
Use equity and ancillary costs as the basis of financing
A solid equity base is your strongest argument for top conditions. Banks recommend covering at least 20 to 30 per cent of the total costs with your own funds. The ancillary purchase costs, which vary by federal state and amount to between nine and 15 per cent of the purchase price, should be covered entirely with equity. These ancillary costs comprise the property transfer tax (3.5 to 6.5 per cent), notary and land register fees (around two per cent) and any estate agent fees. If you contribute more than 30 per cent equity, you can expect an interest rate discount of up to 0.5 percentage points. A property loan without equity is possible, but it leads to significant interest rate surcharges. A precise calculation of your budget is therefore essential.
Master the online comparison process in four steps
A structured approach is the key to comparing the best loan for buying a flat online. Follow the four steps below to keep an overview and make an informed decision.
Here is how to proceed systematically:
Determine your budget precisely: Create a detailed household budget to determine your maximum monthly instalment. Allow a buffer of at least 15 per cent for unforeseen expenses.
Gather all documents: Prepare all creditworthiness and property documents, including the last three payslips, proof of equity and the draft purchase contract.
Compare offers widely: Use at least two different online portals to obtain a broad range of offers from more than 100 banks, insurers and building societies.
Check the terms in detail: Compare not only the effective interest rate, but all contract details such as special repayment options and the interest-free commitment period.
Our expert tip: Always obtain a SCHUFA self-disclosure before making enquiries, so that incorrect entries can be corrected. This can improve your credit rating by more than ten per cent. With these steps, you retain control over the entire process.
Apply expert knowledge for legal safeguarding and interest rate optimisation
Beyond standard terms and conditions, there are legal frameworks and financial instruments that can give you significant advantages. The German Civil Code (BGB), for example, gives you a strong right to terminate. Under Section 489 of the BGB, you can terminate any loan agreement with an interest rate fixed for more than ten years after ten years have elapsed, by giving six months' notice – and without any early repayment penalty. This is an excellent option for refinancing when interest rates have fallen. Our expert tip: Lock in today’s interest rates for your follow-on financing with a forward loan for up to 66 months. This incurs a small interest premium of around 0.02 per cent per month of the lead time, but protects you against interest rate increases of one percentage point or more. That way, you can use the legal options to your financial advantage.
Request your individual risk analysis now
Careful planning and comparing your loan for the purchase of an apartment lay the foundation for your financial future. You have seen that even small details in the contract can make a difference of tens of thousands of euros. Use this knowledge to avoid pitfalls and find the financing that is optimal for you. Have your insurance situation checked free of charge and receive concrete suggestions for optimisation, so that you can fully protect your new property from the outset.
More useful links
Federal Statistical Office offers information on construction prices and property price indices in Germany.
Federal Statistical Office provides tables with data on house prices and land prices in Germany.
The German Bundesbank offers an indicator system for the residential property market.
The Consumer Advice Centre offers knowledge articles on the topic of construction and property finance.
The KfW offers information on the Home Ownership Programme (124) to promote home ownership.
The German Bundesbank provides statistics on interest rates and yields for residential construction loans to private households.
The ifo Institute publishes a press release on expected sharp price increases for property worldwide.
FAQ
How long should the fixed-rate term for my mortgage be?
In a period of historically low interest rates, a long fixed-rate period of 15, 20 or more years is advisable. This secures the favourable terms for a long period and protects you from the risk of rising interest rates when you refinance.
What is the difference between the nominal interest rate and the effective interest rate?
The nominal interest rate (formerly the standard rate) refers to the pure cost of the loan. In addition to the nominal interest rate, the annual percentage rate includes other costs such as processing fees and is therefore the more meaningful value for comparing loan offers.
How many loan offers should I compare?
You should obtain at least three to five different quotes. The best way to do this is to use online comparison portals that access a wide range of banking partners, so that you can gain a broad overview of the market and compare the terms objectively.
Is making an extra repayment always worth it?
Yes, if it is agreed free of charge in the contract. Every additional repayment reduces the remaining debt, shortens the term and lowers the total interest costs. Even small amounts of 1,000 or 2,000 euros per year can generate savings of several thousand euros over the term.
Which documents are most important for the loan application?
The most important documents are proof of income (the last three payslips), proof of equity (bank statements) and property documents (draft purchase agreement, land registry extract, floor area calculation). Thorough and well-organised preparation speeds up approval considerably.
Can I include the additional costs in the financing?
Financing the ancillary costs (110% financing) is rare and only possible with excellent creditworthiness and a very secure income. It leads to significantly higher interest rates, as the risk for the bank increases. It is strongly recommended to pay the ancillary costs from your own funds.
